Use the information in the following table to answer the questions below. Assume you are dealing with short-run aspects of the economy, so the marginal propensity to consume is constant. Also, for simplicity, assume this economy has no taxes. In your answers, expain brifly how did you get the numerical result.Real GDPConsumptionPlannedInvestmentGovernmentPurchasesNet Exports$9,000$7,800$1,500$1,000-$700$10,000$8,600$1,500$1,000-$700$11,000$9,400$1,500$1,000-$700$12,000$10,200$1,500$1,000-$700$13,000$11,000$1,500$1,000-$700$14,000$11,800$1,500$1,000-$700Suppose net export increases by $400 (Assuming MPC, Gevernment Purchases, and Planned Investment are the same). What will be the new equilibrium level of GDP? Consumption?

Aggregate expenditure is a sum of consumption, planned investment, government purchases and net…

Answered: Use the information in the following…

Macroeconomics: Principles and Policy (MindTap Course List)

13th Edition

ISBN:9781305280601

Author:William J. Baumol, Alan S. Blinder

Publisher:William J. Baumol, Alan S. Blinder

Chapter8: Aggregate Demand And The Powerful Consumer

Section: Chapter Questions

Problem 8DQ

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Use the information in the following table to answer the questions below. Assume you are dealing with short-run aspects of the economy, so the marginal propensity to consume is constant. Also, for simplicity, assume this economy has no taxes. In your answers, expain brifly how did you get the numerical result.

Real GDP	Consumption	Planned Investment	Government Purchases	Net Exports
$9,000	$7,800	$1,500	$1,000	-$700
$10,000	$8,600	$1,500	$1,000	-$700
$11,000	$9,400	$1,500	$1,000	-$700
$12,000	$10,200	$1,500	$1,000	-$700
$13,000	$11,000	$1,500	$1,000	-$700
$14,000	$11,800	$1,500	$1,000	-$700

Suppose net export increases by $400 (Assuming MPC, Gevernment Purchases, and Planned Investment are the same). What will be the new equilibrium level of GDP? Consumption?

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